ERC still in a legal bind in resolving RES licenses

By Myrna M. Velasco – July 9, 2017, 10:00 PM

from Manila Bulletin

Despite “risk of default” raised by retail electricity suppliers (RES), the Energy Regulatory Commission (ERC) has admitted that it still has its hands legally tied because of the temporary restraining order of the Supreme Court that effectively stopped the mandatory enforcement of the Retail Competition and Open Access (RCOA) policy in the deregulated power sector.

In an interview with reporters, ERC Officer-in-Charge Alfredo J. Non indicated there have been RES licenses that already lapsed and several others are due to expire,” but we cannot act on them because of the TRO.”

He qualified that they have intuitively considered extending said RES licenses, but they also weighed such action as something that may contravene court orders.

“We have taken initial position that we might be able to issue an extension (of RES licenses), but we can be held in contempt,” Non stressed.

The Retail Electricity Suppliers Association, Inc. (RESA) has stipulated in their motion for intervention at the SC that the expiration of licenses of some of the retail electricity suppliers may render them “on contractual breach” with the contestable customers they are bound to serve under the supply agreements.

Taking such as a serious concern in the competitive segment of the industry, Non noted that they have already stated their position on the matter with the Office of the Solicitor General (OSG) which will correspondingly raise it to the Supreme Court relative to the pending RCOA case.

“We cannot act on those RES licenses that expired, and even those that are still expiring – even the application for new licenses, we can’t also act on them,” he said.

The ERC official further noted “that’s our problem, and that’s out of our hands, we have to wait for what the Supreme Court has to say.” He added, “the least we can do is to facilitate our position that we raised to the OSG and even to the Supreme Court.”

A restraining order was handed down by the high court prior to the February 26, 2017 targeted implementation of mandatory RCOA that could have brought down the contestability threshold also to 750 kilowatts.

Such development wobbled the competitive regime of the restructured power industry, and it had essentially thrown back players into the voluntary phase of RCOA and had them stay for the meantime at just the 1.0-megawatt threshold.